As explained in a prior post by Andrew M. Thaler, it’s general knowledge among matrimonial attorneys that debts classified as domestic support obligations (“DSO’s”) cannot be discharged. Furthermore and maybe not as generally known, attorneys’ fees owed to a non-debtor spouse, whether directly or indirectly, by a debtor can survive a bankruptcy discharge. First, there are some interesting quirks to whether a DSO can be discharged. For instance, a debt does not have be payable directly to the non-debtor spouse for it to be excepted from discharge. Courts look at the substance and the nature of the debt rather than the identity of the payee; for instance, does the non-debtor spouse benefit from payment to the third party? The fact that the obligation is payable to the attorney and not the non-debtor spouse will not necessarily make the debt dischargeable.
Intersection of Bankruptcy and Matrimonial Law: Do I Still Have to Pay These Attorney’s Fees?2/29/2016 Author: Spiros Avramidis
As explained in a prior post by Andrew M. Thaler, it’s general knowledge among matrimonial attorneys that debts classified as domestic support obligations (“DSO’s”) cannot be discharged. Furthermore and maybe not as generally known, attorneys’ fees owed to a non-debtor spouse, whether directly or indirectly, by a debtor can survive a bankruptcy discharge. First, there are some interesting quirks to whether a DSO can be discharged. For instance, a debt does not have be payable directly to the non-debtor spouse for it to be excepted from discharge. Courts look at the substance and the nature of the debt rather than the identity of the payee; for instance, does the non-debtor spouse benefit from payment to the third party? The fact that the obligation is payable to the attorney and not the non-debtor spouse will not necessarily make the debt dischargeable.
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Author: Andrew M. Thaler
The intersection of matrimonial and bankruptcy law can leave parties to a divorce both confused and aggrieved. Matrimonial courts are charged with straightening out the affairs between the spouses. That often includes allocation of property rights without consideration of the rights of creditors who are not parties to the divorce proceedings. When creditor rights are impacted by divorce proceedings problems can arise. If one of the spouses files for bankruptcy the non-debtor spouse's rights may be negatively and substantially affected by the interests of the filing spouse and his or her creditors. |
AuthorsThis blog is maintained by: Spiros Avramidis
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